Is the ADA Correction Over? | Credit: Hameem Sarwar
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Key Takeaways
The $1.15 resistance area rejected the Cardano (ADA) price.
ADA has fallen nearly 25% since its yearly high on Dec. 3.
Has Cardano reached a bottom, or will the price continue correcting?
The Cardano price fell sharply after reaching its yearly high of $1.32 on Dec. 3. The decline culminated with a low of $0.91 on Dec. 10. Despite the considerable drop, ADA did not create a lower low. Rather, its bullish structure is still intact.
This prompts the question: Has ADA reached a local top, or will another upward movement follow this short-term decline? Let’s find out.
The weekly time frame chart shows that ADA has increased rapidly since the start of November (white icon), creating five successive bullish weekly candlesticks. The upward movement led to a high of $1.32, briefly taking ADA above the $1.15 horizontal resistance area.
This is a critical area that has existed since January 2022. It is also the final resistance area until $2.30, so a breakout above it can trigger a rapid upward movement.
However, Cardano could not sustain the increase and created a long upper wick before falling under the resistance area. ADA is creating a bearish candlestick this week, breaking its positive streak.
Despite the rejection, technical indicators are still bullish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are increasing and above their bullish thresholds.
The RSI reading is especially intriguing since the indicator has crossed above 70 for the second time (white arrows).
The second RSI cross above 70 triggered a parabolic rally in the previous cycle, eventually leading to a new all-time high price.
So, the weekly time frame suggests the ADA price will eventually break out above $1.20 and move toward its highs.
What Analysts Are Saying
Analysts on X mostly have a bullish view of the future ADA trend. Alparslan Anteopglu believes the short-term support near $1 will hold, and ADA will gradually begin an upward movement toward its swing high of $1.32.
Rafaela is another trader with a bullish outlook, giving a target of $2. However, FLASH suggests that ADA will initially decline to $0.70 and validate the previous breakout level before eventually breaking out. Look at the wave count and see where the price will head next.
ADA Price Correction Over?
The daily time frame chart shows that ADA may have reached the top of wave three in a five-wave upward movement (black). Wave three has extended, and its sub-wave count is yellow. If the count is accurate, the ADA price has begun wave four in this correction.
The shape of wave four is unclear. Magnitude-wise, the correction may be done since ADA has reached the 0.382 Fibonacci retracement support level.
If this is the case, ADA will likely create a symmetrical triangle for wave four, leading to more consolidation before the eventual breakout.
The hidden bullish divergence (green) in the RSI supports this scenario.
The more bearish scenario suggests wave four will develop into an A-B-C corrective structure. ADA will decline to the 0.5 Fibonacci retracement support level at $0.82 before bouncing if this is the case.
In any case, another upward movement that completes wave five is likely.
Another High Likely
The Cardano price has fallen nearly 25% since its yearly high of $1.32 on Dec. 2. While the decline has been sharp, it is likely not the beginning of a bearish trend reversal.
ADA might have reached a local bottom, though it may create a slightly lower low before it reverses.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
